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Viscount Ullswater: Amendment No. 223 seeks to change the basis on which a new agency shall bring the provisions of a charging scheme to the attention of persons likely to be affected by them. As it stands, the Bill requires the agencies to take such steps as they consider appropriate. The amendment would require them to take reasonable steps in accordance with a procedure prescribed in regulations by the Secretary of State—at least, I understand that to be my noble friend's

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intention. In fact, the amendment is rather more specific. It would require the agencies to take steps for publicising charging schemes in accordance with a procedure specified by the Secretary of State for revoking environmental licences, a procedure which is unlikely to be suitable for this purpose.

I listened carefully to what my noble friend said because his amendment attacks a slightly different prospect which I should like to consider further when I have had an opportunity to read in Hansard what he has said. I believe that the anxieties which I suspect underlie my noble friend's preference for the word "reasonable" are unfounded. As public bodies, the agencies will be under a general duty to act reasonably. That will apply when they are determining what steps it is appropriate for them to take in order to publicise the provisions of charging schemes. We do not think it necessary for such steps to be stipulated in regulations which could constrain the agencies' freedom to develop effective ways of publicising the provisions of schemes. With that explanation, I hope that my noble friend will feel able to withdraw his amendment.

Lord Lucas of Chilworth: I am grateful to my noble friend for his response. He is right is his second assumption. This is not a question of exchanging "appropriate" for "reasonable". The amendment intends to bring a new regime to bear alongside that which already exists. That which already exists has not proved satisfactory in a number of cases. This provision is intended to bring in an additional safeguard.

It is obvious that my amendment—and perhaps what I have said—has not found its mark this evening. However, the tone of my noble friend's response is such that I am encouraged to feel that we might have discussions about this matter before the next stage—

Viscount Ullswater: Perhaps I may interrupt my noble friend. I undertake to write to him on the substance of his amendment. If that is of any help, I hope that he will feel able to withdraw his amendment.

Lord Lucas of Chilworth: I am grateful to my noble friend and look forward to receiving his communication. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Lindsay moved Amendments Nos. 223ZZA and 223ZZB:

Page 35, line 41, leave out second ("the") and insert ("a new").
Page 35, line 49, after ("that") insert ("new").

On Question, amendments agreed to.

Lord Gisborough moved Amendment No. 223ZZC:

Page 36, leave out lines 5 to 8 and insert ("in accordance with the relevant charging scheme").

The noble Lord said: This amendment seeks commitment from the Government that the agencies' fees and charges will be fully transparent and properly attributed. As presently drafted, Clause 40(8) allows the Secretary of State to decide how much of the cost of work done by the Department of the Environment for the agencies can be received under the agencies' charging schemes. This is therefore an area where there is potential for less than transparent accounting.

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It is very important that the agencies' fees and charges are administered on a cost recovery basis. The agencies will need to make it clear how charges are derived and which activities they are funding. Cross-subsidisation must be avoided. Charge payers should not be covering the costs of services supplied to others. Clearly, any system of charging should satisfy the payers that they are getting value for money and that the service is being supplied efficiently and fairly. The agencies will be no exception and must give value for money in the carrying out of their functions. Their fees and charges must be calculated on an open and fair basis and developed through effective consultation with those who will be paying them.

Under Clause 40(3) as drafted, the Secretary of State can set amounts to be recovered by the new agency to meet "cost and expenses" which he

    "considers it appropriate to attribute to the carrying out of"

those functions in relation to activities to which environmental licences relate. That seems to give scope to the Secretary of State for imaginative accounting and that is why reassurance that the clause will not give scope for charges to expand without transparency and clarification are sought.

In addition, at present the wording in Clause 40(4) (b) is such that charges can take account of

    "the depreciation of, and the provision of a return on, such assets as are held by the new Agency".

Obviously, it would not be fair to make those paying the charges cover the cost of buying an asset—a capital cost —and the cost of the asset's depreciation in value.

Clause 40(4) (a) states that when the Secretary of State is determining which costs and expenses it is appropriate to attribute to the new agency's functions, or the Minister's functions or his own in relation to environmental licences, he should take into account the new agency's "financial duties" under Clause 41. Those duties may be set out in the financial memoranda to the agencies but there is no statutory provision for disclosure. It would therefore be useful to have an explanation of what is meant by the term.

Clause 41(3) allows the Treasury to recover any surpluses that the agency may have. However, deficits could still be recovered from future charges to business. That emphasises the need for transparency and efficient management. Obviously, business does not want to pay for the agencies' deficits while the surpluses are clawed back by the Treasury. Britain must receive the best possible return for its investment in environmental protection. It is imperative that the agencies are cost-effective and endeavour to provide good quality regulation at a reasonable price.

I would welcome the Minister's assurance that the Government will remove all areas where there is potential for doubt such as this. I beg to move.

7.15 p.m.

Viscount Ullswater: The amendment seeks to ensure that, where there is any question about which sums recovered by a new agency may fairly be regarded as being recovered for the purpose of meeting a Minister's

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expenses in relation to authorisations under the Radioactive Substances Act 1993 in respect of nuclear licensed sites, this question should be determined in accordance with the relevant charging scheme. Clause 40 as it stands provides that such questions should be determined by the Secretary of State together, in England, with the Minister of Agriculture, Fisheries and Food.

I understand my noble friend's intention in bringing forward this amendment, although I do not think it is necessary or desirable. His intention appears much broader than the area on which the provisions actually fall. Therefore, I shall not discuss the amendment on the very small class of authorisations because I believe that my noble friend wanted that on a much broader basis.

The amendment would require a provision to be built into any scheme relating to authorisations. The current charging scheme made under the 1993 Act expressly provides for the Minister to receive a sum equal to his costs and expenses incurred in relation to the authorisations. In such a case, there will clearly be no question of what sums are payable to Ministers, and subsection (8) of Clause 40 would not be necessary.

There are various ways in which a charging scheme might be formulated and we would not wish to constrain the agencies in this manner. Subsection (3) requires the Secretary of State, when considering whether to approve a charging scheme submitted by an agency, to do two things: first, he must consider representations and objections; and, secondly, he must have regard to the desirability of ensuring that the amounts recovered by way of charges will meet the relevant costs and expenses incurred by the agency and, where appropriate, by Ministers. It would be unduly onerous to require the scheme to include either a set formula for apportioning income or a provision for arbitration in the case of uncertainty or argument.

The clause as drafted will ensure that, if there is any doubt, it will be resolved by those who are concerned with both the proper financing of the agency and the recovery of their own department's costs. In this way a proper balance can be struck. We consider this to be a sensible arrangement.

I believe that the provisions for charging schemes that we have included in the Bill are flexible and fair. It has always been our intention that charging schemes should only recover the agencies' costs, in respect of those of their functions which are relevant to different types of environmental licences. The legislation does not permit the agencies or Ministers to charge for whatever, and however much, they like; under the provisions of Clause 40, charging schemes will be subject to approval by the Secretary of State following consultation with those likely to be affected. We expect the agencies, as we do all public bodies, to be efficient, well run organisations offering good value for money. It is too early to say what level of grant will be provided by government, but I can assure the Committee that we shall take full account of all their functions and the statutory duties that are being placed on them in determining the agencies' resources.

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I hope that those reassurances will enable my noble friend to withdraw his amendment.

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